SBI, PNB, Bank of Baroda shares under pressure, Geojit cautious on PSU banks
1 min read 30 Dec 2020, 11:33 AM IST- SBI, Bank of Baroda, PNB, UCO Bank and Indian Bank were down about 1% each today
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Business News/ Markets / Stock Markets/ SBI, PNB, Bank of Baroda shares under pressure, Geojit cautious on PSU banks
PSU banking stocks underperformed today with Nifty PSU Bank index down about 0.9%. In comparison, the broader Nifty 50 index was flat at 11,940. Among the PSU banking stocks, SBI, Bank of Baroda, PNB, UCO Bank and Indian Bank were down about 1% each.
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PSU banking stocks underperformed today with Nifty PSU Bank index down about 0.9%. In comparison, the broader Nifty 50 index was flat at 11,940. Among the PSU banking stocks, SBI, Bank of Baroda, PNB, UCO Bank and Indian Bank were down about 1% each.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, is cautious on PSU banking stocks after their strong rally this month. The Nifty PSU Bank index is up about 13% so far this month in comparison to 7% gain in Nifty 50 index.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, is cautious on PSU banking stocks after their strong rally this month. The Nifty PSU Bank index is up about 13% so far this month in comparison to 7% gain in Nifty 50 index.
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"The latest RBI report warns of the sharp deterioration in the asset quality of banks post-moratorium. This is likely to impact banking stocks, particularly the PSU bank stocks which have been rallying recently," he said.
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Given the uncertainty induced by COVID-19 and its real economic impact, the asset quality of the banking system may deteriorate sharply going forward, the RBI said in the report.
The central bank has introduced various measures to support the banking sector including a relaxation in recognition and provisions for bad loans. "The challenge is to rewind various relaxations in a timely manner, reining in loan impairment and adequate capital infusion for a healthy banking sector," the central bank said it in its annual report on Trends and Progress of Banking in India.
The Nifty Private Bank index was also down 0.45% today.
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On the overall markets, Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments, said: "Nifty seems a little nervous to hit the 14000 marks. We have gone around that level yesterday and today. It is really a mere formality to achieve that as the Nifty seems poised to conquer 14100 as a potential target. A good support lies at 13600 so traders can consider buying into this trend during any intraday correction."
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Updated: 30 Dec 2020, 11:34 AM IST